After selling a property in India, one of the important decisions that a person needs to make is whether to keep the money in India or take it abroad. The decision ultimately depends on the individual’s requirements, but there are certain factors that should be considered to make an informed decision.
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One option is to keep the money in India and transfer it to an NRE (Non-Resident External) account. You can withdraw money anytime for any purpose from an NRE account, which is similar to any foreign account. The significant advantage of keeping money in an NRE account is that the interest earned on the money is tax-free. Furthermore, you can repatriate the money anytime without submitting any forms.
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Keeping the money in India also allows for investment in the Indian stock market, but this option may not always be suitable as the market can be volatile. A better approach would be to park the money in an NRE account and invest in the global market through a systematic investment plan. Another benefit of keeping the money in an NRE account is that the interest rate offered by most banks is quite attractive, currently around 8%. Furthermore, the money can be used whenever required, providing flexibility to the individual.
One of the most significant benefits of keeping money in an NRE account is diversification. While the Indian market may be subject to fluctuation, keeping the money in a foreign currency like the US dollar provides a hedge against such volatility.
In case there is a requirement to use the money in India, transferring it from an NRE account to an NRO (Non-Resident Ordinary) account is a quick and straightforward process. You can transfer the money back to the NRE account by filling out a 15 CACB form.
conclusion
If the individual does not require the money immediately after selling the property, it is advisable to park the money in an NRE account. This will provide better returns, tax-free interest, flexibility, and diversification. You can withdraw the money whenever you require or invest it in a systematic manner in the global market.